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Bear of the Day: CDW Corp (CDW)

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Sometimes I write a Bear of the Day article on a stock we basically all agree is going down the tubes. Other times, I write one and I get all sorts of hate speech because, well, we don’t all agree. Now I’m not here to come out and tell you that today’s pick is going to drop to zero. What I am going to do is tell you it is a Zacks Rank #5 (Strong Sell), and you should do a little more digging before loading the boat.

I was actually surprised to see CDW Corp (CDW - Free Report) as a Zacks Rank # 5 (Strong Sell). For those of you who don’t know, CDW Corporation provides information technology (IT) solutions to business, government, education, and healthcare organizations in the United States, Canada and the United Kingdom. The company offers discrete hardware and software products, as well as integrated IT solutions, including mobility, security, data center optimization, cloud computing, virtualization, and collaboration.

Let me be clear here, things have been going fine over at CDW. However, analysts have been very silent about them recently. The last earnings estimate revision the company has seen took place sixty days ago. And that revision was to the downside where an analyst dropped their estimate for the current quarter down to 69 cents from 71 cents. While many other companies out there have seen estimates revised to the upside, the silence regarding CDW is what’s troubling.

The stock has performed brilliantly YTD. The IT Services Industry ranks in the Top 30% of our Zacks Industry Rank. YTD the industry is up 7.1%. Shares of CDW are outperforming the industry, up 13.3% so far this year. Other stocks in the same industry include Zacks Rank #1 (Strong Buy) stocks Computer Sciences Corp (DXC - Free Report) and Sphere 3D Corp (ANY - Free Report) .

Shares of CDW are a bit overbought here with the Commodity Channel Index up at 166. Here just shy of $60 it’s stalled out near its 52-week high for the second time this year. There is still a bullish trend line intact which was tested in mid-April. CDW will be reporting earnings before the market opens on May 3rd. Analysts are expecting 71 cents EPS on $3.24 billion.

More Stocks to Sell. Now.

Beyond our Bear Stock of the Day, today's list of 220 Zacks Rank #5 Strong Sells demand even more urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. Many appear to be sound investments but, since 1988, such stocks have actually performed more than 6X worse than the S&P 500.

See today's Zacks "Strong Sells" absolutely free >>.


 


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